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Wynn posts $2.07bn net loss as Covid-19 takes its toll in 2020

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Wynn Resorts International has posted a $2.07bn net loss for its 2020 financial year after the enforced closure of its casino properties due to the novel coronavirus (Covid-19) pandemic led to a sharp decline in revenue.

Total operating revenue for the 12 months through to December 31 amounted to $2.10bn, down 68.3% from $6.61bn in the previous year.

Wynn saw revenue decline across all business areas, as a direct result of having to temporarily close its casino properties, in line with regional restrictions for Covid-19.

Gaming revenue plummeted $72.9% to $1.24bn, while rooms revenue declined $61.7% to $308.0m. Food and beverage revenue was down 59.8% to $329.6m, and entertainment, retail and other revenue fell 46.6% to $221.1m.

Breaking down revenue by regional performance, Wynn Macau revenue was down 80.1% at $505.4m and Wynn Palace, also in Macau, saw revenue fall 77.1% to $474.7m. In the US, Las Vegas revenue was down 54.2% to $747.9m. Also in the US, revenue at Wynn’s Encore Boston Harbor stayed relatively level at $361.7m.

In terms of online gambling, Wynn in October last year formed Wynn Interactive through the merger of its US online sports betting and gaming business, social casino business, and strategic partner BetBull.

Wynn, which owns approximately 72% of the venture, did not publish details of its financial performance in its opening months, but it did confirm it is seeking to launch the WynnBET sports betting app – operated though Wynn Interactive – in more state. WynnBET, is already live in New Jersey, Colorado, and Michigan.

“We believe our product will be increasingly compelling with each release over the coming months and look forward to growing the business in 2021,” Wynn chief executive Matt Maddox said.

Operating expenses for the year reached $3.32bn, down 42.0% on the previous year as the operator saved costs due to its casinos being closed for periods of time. This was especially true for casino costs, which dropped 63.5%.

After accounting for $500.2m in other costs, including interest expense, Wynn posted a loss before tax of $1.76bn, compared to a $488.2m profit in 2019.

The operator paid $564.7m in taxes and while it benefitted from $259.7m in income from non-controlling interests, net loss for the year reached $2.07bn, compared to a $123.0m profit in the previous year.

Wynn did see some recovery towards the end of the year as many of its casino properties were open throughout the fourth quarter. However, revenue was still down 58.5% to $686.0m as some restrictions remained in place, with limits on capacity the most significant of these.

Operating expenses declined 39.3% to $864.6m and Wynn also noted $131.1m in other costs, leaving a loss before tax of $309.7m, compared to a $309.7m in 2019. Adjusted property EBITDA for the quarter was down 84.3% to $69.8m.

The operator paid minimal taxes in the quarter, and after accounting for $40.8m in income from non-controlling interests, net loss for Q4 was $269.5m, which was wider than the $72.9m loss posted in the previous year.

“We are encouraged by the progress we have made at each of our properties over the past several months, as we continue along the road to recovery from the pandemic,” Maddox said.

“In Macau, the gradual and thoughtful easing of visitation restrictions allowed us to return to adjusted property EBITDA profitability in the fourth quarter, with particular strength in our premium mass business.

“In the US, our operations at both Wynn Las Vegas and Encore Boston Harbor were resilient as we continue to deliver our industry-leading service, while remaining focused on costs.”